Purchase Vehicle Purchase Analysis Vehicle 1 Vehicle 2 Veh ✓ Solved

Perform a purchase vehicle purchase analysis comparing the details and costs associated with the following vehicles: Vehicle 1 (2016 Ford Mustang Convertible), Vehicle 2 (2014 Honda Accord Hybrid), Vehicle 3 (2014 Ducati Diavel Strada), and Vehicle 4 (2016 Chevy Colorado). The analysis should include vehicle descriptions, prices, MPG (City and Highway), yearly costs (maintenance, registration, insurance), loan details (if applicable), and total monthly payments. It should also address whether each vehicle is affordable based on the provided assumptions.

Paper For Above Instructions

When it comes to purchasing a vehicle, there are several crucial elements to consider that can play a significant role in the overall ownership experience. This analysis engages in a comprehensive overview of four distinct vehicles: the 2016 Ford Mustang Convertible, the 2014 Honda Accord Hybrid, the 2014 Ducati Diavel Strada, and the 2016 Chevy Colorado. Each vehicle possesses unique features and expenses that influence the decision-making process for potential buyers.

Vehicle Overview

The first vehicle, the 2016 Ford Mustang Convertible, is a popular passenger vehicle known for its sportiness and performance. This vehicle is priced at $27,800 and provides a city MPG of 17 and highway MPG of 28, giving it an average MPG of 22.5. The ownership costs contribute significantly to the decision to purchase this vehicle. Annually, the maintenance costs amount to $600, while the registration fees are set at $100 and insurance costs total $1,000.

The analysis delves further into the financial requirements associated with this vehicle. A loan might be needed to cover the purchase price. Assuming an amount to borrow of $19,800 with an APR of 3.20% over five years results in a monthly loan payment of approximately $357.54. Additional monthly costs include $66.67 for gas, $50 for maintenance, and $83.33 for insurance, culminating in a total monthly payment of $557.54. According to the defined budget parameters, this vehicle is ultimately deemed not affordable, as it exceeds the given monthly payment allowance of $500.

Vehicle 2: 2014 Honda Accord Hybrid

The second vehicle analyzed is the 2014 Honda Accord Hybrid, which is priced at $20,463. This vehicle also offers good fuel efficiency, with a city MPG of 50 and highway MPG of 47, culminating in an average of 48.5 MPG. Yearly costs include maintenance of $300, registration fees of $100, and an insurance cost of $700 per year.

Should an owner require financing for this vehicle, the amount to borrow could be similar to the Ford Mustang, at around $16,463, given various deductions. The APR might be slightly lower at 1.90%. Thus, over five years, the monthly loan payment would be about $190.00. Combined with monthly expenses for gas (approximately $51.04), maintenance ($25), and insurance ($58.33), the total monthly payment rounds to approximately $314.37, rendering this vehicle an affordable option.

Vehicle 3: 2014 Ducati Diavel Strada

Next in line is the 2014 Ducati Diavel Strada, a motorcycle priced at $14,250. With a city MPG of 41 and highway MPG of 63, its average MPG stands at 52. The annual costs are considerably lower, with maintenance approximately at $500, registration fees of $60, and insurance of $1,500 per year due to the high risk associated with motorcycles.

The loan amount for this vehicle, if necessary, could be about $12,700 with a 5.90% APR. This results in a monthly payment of approximately $249.76. Monthly costs for gas might be around $37.50, maintenance $41.67, and insurance $125, bringing the total monthly expenditure to approximately $455.93. As such, the Ducati is also affordable within the available cash flow.

Vehicle 4: 2016 Chevy Colorado

The final vehicle, the 2016 Chevy Colorado, is categorized as a truck and comes priced at $20,100. Its MPG ratings are lower than the other vehicles with 18 in the city and 25 on the highway, averaging 21.5 MPG. Yearly costs encapsulate maintenance fees of $500, registration fees of $100, and an insurance cost of $600 annually.

If financing is needed at an amount to borrow of $18,000 (APR 2.90%), the monthly loan payment rounds to about $363.76. With gas prices affecting the budget, the truck’s fuel cost per month (pertaining to 600 miles of driving) would equal approximately $75. Since maintenance costs are $50 and insurance could come to $50 per month, the overall monthly payment is approximately $628.76, categorizing this vehicle as unaffordable given the $500 monthly limit.

Conclusion

In summary, after analyzing each vehicle's costs, descriptions, and affordability, it is evident that the 2016 Ford Mustang Convertible and the 2016 Chevy Colorado present challenges due to their higher monthly expenses. The 2014 Honda Accord Hybrid and the 2014 Ducati Diavel Strada, on the other hand, represent more financially viable options for prospective buyers. Understanding the detailed aspects of maintenance, insurance, and financing plays an essential role in making educated purchasing decisions.

References

• National Highway Traffic Safety Administration. (2020). Vehicle safety ratings. Retrieved from https://www.nhtsa.gov
• Consumer Reports. (2023). 2023 Vehicle Buying Guide. Retrieved from https://www.consumerreports.org/cro/vehicles/index.htm
• American Automobile Association (AAA). (2022). Your Driving Costs. Retrieved from https://www.aaa.com
• Edmunds. (2023). New & Used Car Reviews, Prices & Comparisons. Retrieved from https://www.edmunds.com
• U.S. Department of Energy. (2023). Fuel Economy. Retrieved from https://www.fueleconomy.gov
• Kelley Blue Book. (2023). Vehicle Pricing and Information. Retrieved from https://www.kbb.com
• Insure.com. (2023). Car Insurance Costs. Retrieved from https://www.insure.com
• Bankrate. (2023). Car Loan Rates - Compare the Best Offers. Retrieved from https://www.bankrate.com
• Cars.com. (2023). New and Used Car Listings. Retrieved from https://www.cars.com
• J.D. Power. (2023). Vehicle Quality Ratings. Retrieved from https://www.jdpower.com